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Rushed special session followed quickly by $500-million expansion announcement

Mississippi lands Nissan phase two deal

JACKSON — Last Monday, Nissan North America announced it would invest $500 million to expand its new assembly plant being built in Madison County by another million square feet, upping the plant’s annual production capacity from 250,000 vehicles to 400,000 vehicles and adding another 1,300 new direct jobs to the workforce.

“Building products that meet the needs of the North American market is a vital ingredient to profitable growth,” said Carlos Ghosn, president and CEO of Nissan. “We are investing further in our Canton plant in light of strong demand for Nissan products in North America.”

The expansion will accommodate the additional production of Nissan Altima, the award-winning sedan that is selling at a record pace in North America, beginning in the spring of 2004. The Nissan Altima will also continue being built at Nissan’s plant in Smyrna, Tenn., along with the Xterra sport utility vehicle and the full line of Nissan Frontier compact pickup trucks. Production of the Nissan Maxima will begin there in early 2003. Production of full-size pick up trucks, sport utility vehicles for the Nissan and Infiniti lines, and the next generation Nissan Quest minivan, is scheduled to begin next spring at the Canton facility.

“The extension of our plant capacity in Canton is consistent with Nissan’s strategy to increase presence in North America,” said Emil Hassan, senior vice president of North American Manufacturing, Purchasing, Quality and Logistics. “Having the capacity in Canton to produce 150,000 additional Altimas will allow us to satisfy strong and growing demand for this car. It will also give us flexibility in configuring production of future products for North America.”

Construction of the Canton plant began in April 2001, and construction of the extended facility will begin immediately. Upon completion of both phases of construction at Canton, Nissan’s production capacity in North America will be 1.3 million units. Existing North American vehicle manufacturing facilities are located in Smyrna, and Aguascalientes and Cuernavaca in Mexico. Nissan produces engines at its plant in Decherd, Tenn.

The news comes two weeks after another announced Nissan expansion. On June 12, Nissan Technical Center North America announced that it would embark on a $38.8-million expansion of the research and engineering facility northwest of Detroit to enhance the company’s worldwide vehicle development capabilities.

When asked two weeks ago if he had reason to believe the Canton facility would expand before it opened, U.S. Sen. Trent Lott said: “We had reason to believe that Phase II was going to be forthcoming soon. We knew about that as much as a year ago. Frankly, we learned early on that there was likely going to be a Phase II and that Mississippi would be in a good position for a second phase. Because of a variety of (reasons), Nissan decided to go ahead as soon as possible and get something worked out with Mississippi or go to Tennessee or Canada, but they really moved up on the schedule and wanted to get an agreement and be ready to go to work on it very soon. We knew it was in the offing … even during the discussions on Hyundai and that was one of the reasons why I was concerned that we pursue the Hyundai plant in a way that would also allow us to be competitive for Phase II of Nissan.”

During the special session June 21, Mississippi lawmakers agreed to give Nissan $68 million to expand the automotive plant being built in Madison County. The package for a second phase includes $23.5 million for worker training; $22.5 million for road, water system and other infrastructure improvements; $12 million to prepare the site; and $10 million for a vehicle preparation facility. In 2000, state lawmakers approved $295 million in bond revenue for the Phase I project.

Two days before the special session was held, Gov. Ronnie Musgrove and Mississippi Development Authority chief Bob Rohrlack unveiled a report that showed the state should break even on its initial investment by 2007. As a result of the new plant, the state should collect nearly $1 billion in new taxes by 2025, according to the report completed by Hattiesburg-based Goodman Group.

“Without a firm commitment by Mississippi, the thousands of Nissan Phase II jobs could have gone somewhere else — namely two locations in Tennessee, one in Canada or another competing site in Mexico,” Lott said.

At the press conference announcing the expansion, Musgrove said: “With the addition of the Nissan Altima to the production line in Canton, we will have another benchmark to aim for, and our commitment is to complete the expansion ahead of schedule and under budget as well.”

Mississippi Economic Council president Blake Wilson said the state responded to marketplace needs.

“The Altima is the hot car right now,” he said. “Nissan needs more capacity and we’re ready to help give it to them.”

When asked if he thought elements of the package were addressed to the business community’s satisfaction, Wilson said he thought so.

“The whole project, not just the latest expansion, is going to be bigger than anyone can imagine,” said Wilson.

Contact MBJ contributing writer Lynne W. Jeter at (800) 993-3392 or lwjeter@yahoo.com</a.

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